Quote:
Originally Posted by Ruien
What is the circle of life for Gamestop?
Don't think it is a big deal shutting down some stores. I have 2 locations in the same mall and 1 literally 2 blocks away of said mall. I am sure the Switch is helping sales. The thing that probably hurts them the most is being able to digital download games with each console doing their own sales which js just as good or better than Gamestop (and any other retailer).
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To answer your question: "Circle of Life" was a cute little name GameStop decided to dub their policy of pushing used sales and preorder numbers. It has been a mainstay for the company business model for a long time, but what it had become was taken to the Nth degree.
Essentially, sales metrics were tracked by the store and per employee at said store. A percentage of sales HAD TO BE - as in WAS REQUIRED from on high - to consist of used games, accessories, and a certain number of pre-orders had to be met. Again, per employee AND a target per store.
It has long been one of the major complaints by customers (aside from trade pricing, but that's a whole 'nother discussion in and of itself) about the chain that employees are super pushy about pre-orders. This idea of each employee being mandated to get so many pre-orders under their belt per week is a major reason for that trainwreck. People don't *want* to be pushy, but when you're only there one or two days a week in a high volume store, you likely needed an ungodly amount of presales to "justify your position" as it were. There is likely a drawer full of applications of many other expendable, fresh faced nerds you can be replaced with ad infinitum with dreams of just working there around their favorite hobby just like you.
Add into that the used sales. The policy was structured in such a way where selling new items such as games, accessories, and even systems, actively HURT the used game metrics by inflating the percentage of used stuff needed that week. If somebody came in and bought a shiny new PS4 and a few brand new games for their birthday, and didn't also plunk down about 8 pre-orders and buy a bunch of used shit, that's about $500 counting against not only that store, but that employee running the transaction. Customer has no reason to give a fuck. After all, they got what they came in for. The employee, however, is now sweating bullets.
All of this came to a head with a recent Kotaku article where this toxic environment (finally) came out in the open to documented public knowledge as opposed to being something people "know" but don't/can't talk about much like that "EA Spouse" letter cracked the window on that publisher's shady ways a number of years back.
As such, GameStop finally dialed back on the stringency of the policy (not because it was bad, mind you, but because of the PR mess- it's still a corporation, and had this not come out, you can bet your ass they would have still been doing the same old shit) and have recently started factoring in new sales into part of the business metric in a way that screws over their frontline grunts a tad less than it used to.
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I understand about the saturation. There are THREE GameStop locations near me: all of which are literally within the same two mile stretch... though some of that has to do with business consolidations over the years than just building redundant shops. The one at the mall was, once upon a time, a Software, ETC location, the next one down the street started life as a FuncoLand. The third was an actual, true GameStop location. They oddly hold their numbers, though, and don't cannibalize eachother's sales like you'd think they would, where other standalone locations nowhere near these three places that you'd think could thrive have come and gone. Even so, closing down a few places isn't exactly "The Fall of Rome" that people are portraying this as...
*but*
... if they keep going, and need to close more after next year, then would be the time to start looking at it as a potential disaster for the company.